I have participated in many different types of event in my time, but none so intense as the Science Museum’s ‘speed geeking’. This involves gathering a dozen experts from fields as varied as cancer research, space mining, nuclear physics and materials science, and asking them to justify why their area will be ‘the next big thing’. Not to each other, but to groups of members of the public, who get four minutes with each expert before moving on to the next. The object is not to identify areas of mutual attraction, but to get scientists to explain their pet subject succinctly and passionately, and to convince their rapidly rotating audiences of its role in shaping their future.

What was I doing at such an event? Loosely representing environmental science, and trying to convince my listeners that the idea of the Circular Economy will be the next big thing. Having explained twelve times, very quickly, that businesses increasingly recognise that allowing most of our resources to escape the economy prematurely is not a good plan for the future, and that ‘circularity’ has clear benefits, including all the energy, water and pollution saved when products are reused and materials are recycled, I thought I was doing quite well. Until one audience member said ‘but where’s the science?’.

I responded that science is the basis of understanding the impacts of supply chains (life cycle analysis), science provides novel materials (some more recyclable than others), and climate science is the basis of the carbon reduction agenda. Also, of course, there is plenty of technology involved too, including 3D printers to make spare parts, electronic devices that conveniently fall apart when you heat the screws up slightly and all kinds of clever separating and sorting gizmos to help get stuff back. My audience looked vaguely convinced, but they knew and I knew that most of what I was talking about had nothing to do with science, and everything to do with economics.

Inefficient economics
There are few clearer illustrations of this than the scandal of food waste, back in news last week with the Institution of Mechanical Engineers’ reporting that between a third and half of food produced globally is wasted. Growing food, getting it to people and eating it before it goes off is not rocket science – the problem stems from the way we have allowed global market places to develop.

While we eagerly consume the fruits of distant supply chains and cheap labour, we have no purchase on the agricultural, transport, storage and buying practices which create massive losses between field and plate. At the other end of the chain, we don’t pay enough for our food to stop us throwing tonnes away, either directly or, indirectly, by not challenging the retailers who reject perfectly good produce on our behalf. We are embedded in a value chain that assumes that someone else can deal with the environmental and human consequences of waste. But it’s simply a matter of time before the costs land in some way.

Mispriced risk
The situation is no different for other resources: metals, minerals, plastics, and timber. As Dustin Benton has spelt out previously, as soon as we see environmental risk as a crucial component of supply risk, it becomes obvious that less wasteful treatment of resources along the whole supply chain is a business imperative, a benefit to be set alongside the more immediate monetary benefits of a firm’s own resource efficiency. But the legacy of ‘mispriced risk’ will be hard to reverse; it entails a shift in mindset towards the longer term and a common frame for risk accounting.

Business action
The reason to be cheerful in all of this is that, in some ways, businesses can change the economics more readily than governments, whose nervousness of unintended consequences, and the possible global market ripples of their interventions, leads to almost paralysed caution. But large businesses can set the terms for their suppliers. In some circumstances, they could just as easily mandate resource efficiency or circularity as they have previously mandated against or sanctioned wastefulness.

Small businesses may also be able to club together to exercise power in their supply chains, so long as governments don’t hit them with allegations of anti-competitive behaviour. Where businesses will find it harder to mandate change is in mobilising capital; that relies on the finance industry sharing the wider view of supply risk and accepting longer returns on the investment needed to put the infrastructure of the circular economy in place. There is also a need to work more collaboratively with governments to get new ways of doing business underway. This is already starting in some countries – watch this space.

Julie Hill is a Green Alliance associate, chair of the Circular Economy Task Force, and author of The secret life of stuff (Vintage, 2011). Follow Julie on Twitter @JulieEHill and Green Alliance @GreenAllianceUK